<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114111128/637218549c7e80680e0baa37jpeg.jpg" alt="" width="664" height="450"/><figcaption></figcaption></figure>The crisis that is consuming Sri Lanka has sent warning bells ringing in Nepal. While sensational media headlines, some of them in the Indian press, have drawn too close a comparison between the two countries, there are parallels.Nepal does not have the kind of debt burden that has forced Sri Lanka to default on its loans. Ironically, it is Nepal’s underdevelopment that cushions it from global upheavals. Politics may be in disarray here too, but at least we do not have an executive president, a prime minister and three other brothers who are ministers in government.Nepal’s disease may not be as severe as Sri Lanka, but <a href="https://archive.nepalitimes.com/article/editorial/A-tale-of-Nepal-and-Sri-Lanka,1086" target="_blank" rel="noopener noreferrer">the symptoms are the same</a>.For decades, Sri Lanka was the development model that the rest of South Asia strived to emulate. Its 95% literacy, equitable health care, a proficient bureaucracy were the envy of the developing world.But even a well-educated public and effective social security system stand no chance against bad leadership, and can wreck a once-vibrant democracy. The rot in Sri Lanka started as far back as 1956, with ultra-nationalist leaders building vote banks with exclusionary ethnic politics.Read also: <a href="https://www.nepalitimes.com/latest/asias-new-cold-war/">Asia’s new Cold War</a>, Dhirendra NalboThe grievances of the minority community piled up, erupting in the anti-Tamil pogroms of 1983, and the inevitable slide to conflict. At one point in the late 1990s, a country half the size of Nepal and with two-thirds of its population had two <a href="http://archive.nepalitimes.com/news.php?id=9345#.YoMV3RRBxpQ" target="_blank" rel="noopener noreferrer">civil wars raging</a> at the same time: the ethno-separatist conflict in the north, and <a href="http://archive.nepalitimes.com/news.php?id=507#.YoMUpxRBxpQ" target="_blank" rel="noopener noreferrer">the ultra-Marxist JVP</a> uprising in the south.The JVP insurgency was crushed, but by the time <a href="http://archive.nepalitimes.com/news.php?id=15978#.YoMV8xRBxpQ" target="_blank" rel="noopener noreferrer">the Tamil war</a> came to a violent end in 2009 nearly 100,000 Sri Lankans had been killed. In comparison, Nepal’s Maoists insurgency lasted a decade and left 17,000 dead.The precursors of Sri Lanka’s current crisis lie in post-war politics and the rise and fall, and rise again, of the Rajapaksa family, its greed, ambition and <a href="http://archive.nepalitimes.com/regular-columns/Here-We-Go/here-we-go-silenced-by-state-sri-lanka,182" target="_blank" rel="noopener noreferrer">drift towards authoritarianism</a>. Sri Lanka’s thriving tourist industry was destroyed in the deadly Easter bombings in 2019, and the pandemic wiped out what remained. Exports and remittances from its workers abroad slumped.In addition, the Mahinda Rajapaksa in his previous stint had borrowed extravagantly from China for grandiose infrastructure projects, and the Chinese were demanding their pound of flesh.Another Rajapaksa brother as agriculture minister decreed overnight that Sri Lanka would go organic, and banned the import of agro-chemicals. Tea export and food production fell.The <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/" target="_blank" rel="noopener noreferrer">Ukraine crisis</a> could not have hit at a worse time. Fuel prices doubled in a space of weeks, and Sri Lanka had no foreign exchange reserve to pay for imports. Faced with a 40% inflation rate, <a href="https://www.nepalitimes.com/latest/the-geopolitics-of-food/" target="_blank" rel="noopener noreferrer">a crippling shortage of food</a>, cooking gas and fuel, peaceful protesters were camped out in central Colombo.Then, on 9 May the Rajapaksa brothers sent hired goons to drive out demonstrators from Colombo’s seafront promenade. The police stood by, and visuals of violence went viral on social media. Nine people were killed and scores injured as protests spread nationwide.Prime Minister Mahinda Rajapaksa stepped down, and his much-reviled brother President Gotabaya Rajapaksa swore in Ranil Wickremasinghe as prime minister for the sixth time, beating a record set by our own Sher Bahadur Deuba.This could be too little too late. As long as the Rajapaksas cling to power, Sri Lankans fear that the nepotism, corruption, and mismanagement will continue.The coming weeks are critical for Prime Minister Wickremasinghe, and he himself admits that things will “get worse before they get better”.Sri Lanka is an object lesson for us in Nepal about how <a href="https://www.nepalitimes.com/here-now/clean-up-elections-to-clean-up-politics/" target="_blank" rel="noopener noreferrer">short-sighted leaders</a>, populism, and lack of accountability of elected despots and their dynasties can completely ruin a country that was once so full of promise.Crises like these do not just happen overnight, they are the result of decades of mal-governance by leaders who neglect the needs of citizens. Democracy is supposed to fix that, but this is what happens when leaders hijack the democratic process itself.Nepal has a unique opportunity during <a href="https://www.nepalitimes.com/latest/turning-a-new-leaf-in-2079/">this election year</a> to find leaders that can take the country forward. That so many independent candidates have won <a href="https://www.nepalitimes.com/banner/nepals-local-election-gives-power-back-to-people/" target="_blank" rel="noopener noreferrer">local elections</a> this week should be a wake-up call for Nepal’s politicians to mend their ways or be swept away by public anger.

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How not to be a Sri Lanka

<figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19959c7e80680e0ac828jpeg.jpg" alt=""/><figcaption>Photo: AMIT MACHAMASI</figcaption></figure>This short book, Political Economy of Social Change and Development in Nepal, by Jeevan Sharma, a senior lecturer on South Asia and international development at the University of Edinburgh, packs a punch. Drawing on his own original field research and the ideas of Karl Polanyi on The Great Transformation (1944) as well as secondary literature, Sharma has produced a holistic overview and analysis of the economic, social and political transformation that Nepal has experienced over recent decades. `His work challenges many of the prevailing characterisations and explanations of that process, and identify some of the contradictions that underlie the more visible fault lines that others like Ram Sharan Mahat and Baburam Bhattarai also have identified. In his Introduction Sharma writes that ‘change, transformation and development have been recurrent themes, not only in everyday conversations, political rhetoric and social movements, but also in Nepali public culture and literary writings since the 1950s’. He then reviews both the main features of the changes that have taken place since the 1950s and also some of the different theoretical and empirical studies that have addressed those changes. Sharma warns against the uncritical adoption of Polanyi’s framework for ‘the Global South’, but argues that a more complex model, involving ‘a three-sided constellation of conflict among proponents of marketisation, adherents of social protection and partisans of emancipation’, would make it possible to connect ‘politics, society and economy’. He does not consider in any detail alternative approaches to the ‘political economy’ of social change and development in Nepal (eg the ‘neo-liberal’ and the Marxist) although he sees the ten-year <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/02/16/making-war-on-the-day-of-love/" target="_blank" rel="noopener noreferrer">Maoist insurgency</a> (1996-2006) as part of a broader movement for social justice, rights and citizenship that he argues has been developing ‘since the 1950s’. The book has four main chapters, each considering an axis of change. Chapter 2 ‘From Subjects to Citizens’ considers Nepal’s political ‘transition’ focuses particularly on the period since the 1950s. The first half of the chapter charts the uneven process the transition from subjects to citizens at the national level, the second half examines local perceptions of the dynamics of social change with particular reference to changes in caste, gender and local power relations and to the role of the Maoist insurgency in bringing about these changes. This section draws on Sharma’s own fieldwork in western Nepal. Chapter 3 ‘Peasantry, Mobility and the Changing Face of Rural Nepal’ looks briefly at the economic and social history of the peasantry in Nepal and ‘changing rural society’, exploring the diversification of rural livelihoods, the weakening of ‘caste-based feudal relations’ and the commodification of labour. This leads on to a consideration of <a href="https://www.nepalitimes.com/opinion/nepali-migration-in-the-2020s/" target="_blank" rel="noopener noreferrer">migration</a>, which he rightly sees as having a long history from the mid-18th century onwards. Somewhat controversially, Sharma identifies three to five ‘waves’ of migration, the last of which became more widespread after the 1990s and ‘has come to shape the nature of the remittance-based national economy of Nepal’ – leaving many Nepalis in low-paid, highly exploitative and precarious employment. I would have preferred to see migration as characterised by different ‘forms’ or ‘regimes’, often contemporaneous rather than sequential. And despite the undoubted importance of remittances in contemporary Nepal would contest the notion that Nepal’s economy is ‘remittance-based’. There are many different strands in Nepal’s complex integration in the wider regional and global economy, including not only the export of labour, but also of other resources as commodities, and the importation of commodities from other countries, foreign direct investment, loans and ‘<a href="http://archive.nepalitimes.com/news.php?id=19592#.YXet2E1BzOQ" target="_blank" rel="noopener noreferrer">foreign aid</a>’. It is also debatable, as the climate crisis deepens in this most vulnerable of countries, whether paid employment away from home is necessarily more precarious than livelihoods based on <a href="https://www.nepalitimes.com/latest/aid-rarely-aids-agriculture-in-nepal/" target="_blank" rel="noopener noreferrer">agriculture</a> and embedded in a local economy and society often characterised by hierarchy and inequality.   Chapter 4 ‘Mobility and Educational and Occupational Futures’ focuses on the experiences of young men from rural Nepal as they struggle to overcome the challenges of mobility and find secure, and salaried employment. It draws heavily on Sharma’s fieldwork in Palpa and explores ‘social meanings and patterns of mobility’, looking at the links between education and employment in particular, but also considering the significance of caste and ethnic identities in determining outcomes. This chapter is particularly rich in ethnographic terms, and complements Sharma’s earlier work on ‘youth, migration and masculinities in Nepal’. It would be good if some anthropologist were to undertake a similar investigation into the education and subsequent livelihoods of girls and women. Chapter 5 ‘Development and Patronage Politics’, while referring to programs undertaken during the early 20th century ‘that would fall under what is broadly regarded as development’, Sharma sees 1950 as ‘a critical moment in Nepal’s development history’. He examines briefly what he calls the ‘initial rush for development’ in the 1950s and then the program of ‘nation-building through Bikas’ under the Panchayat System dominated by King Mahendra. This is followed by a review of the period after the first Jana Andolan from 1990 to 1996 (‘democratisation for development’) and of the Maoist insurgency (‘conflict and development’) from 1996-2006. Sharma considers the Maoists’ theory, strategy and practical contribution to economic, social and political change. While recognising that ‘development was at the core of Maoist ideology and strategy’ and acknowledging their positive influence in certain areas – notably addressing inequality and social discrimination – he seems largely unimpressed by their actual achievements and has a number of negative things to say about their practice. Somewhat surprisingly, he does not refer in any detail to their theoretical and political analysis of development and underdevelopment, despite several of the Maoist leadership publishing them widely. He notes, however, that the Maoist insurgency prompted various development agencies to reconsider their own strategy for addressing ‘<a href="https://www.nepalitimes.com/editorial/end-of-war-is-not-peace/" target="_blank" rel="noopener noreferrer">structural violence</a> and discrimination’ – resulting in the establishment of a new consensus on the priority on gender, caste and ethnicity through the lens of  inclusion and empowerment. This effectively downgraded the concerns of economic (class) inequality, and poverty, which had hitherto been a main concern of both the World Bank and the UK Department for International Development (DfID). He also remarks that the conflict itself had the effect of accelerating the process of migration, both temporary and permanent, from the rural areas to the towns and abroad, thereby contributing to the transformation of both rural and urban economy and society. ‘The Maoist insurgency coincided with a major economic change in Nepal, that is, the commodification of land and labour as never before, with the deepening of the market in the citizens’ everyday lives,’ he writes. This process continued in the next period, following <a href="https://archive.nepalitimes.com/article/nation/revisiting-maoist-demands,2860" target="_blank" rel="noopener noreferrer">Jana Andolan II</a> and the <a href="http://archive.nepalitimes.com/news.php?id=12806#.YXetRU1BzOR" target="_blank" rel="noopener noreferrer">Comprehensive Peace Agreement</a> (CPA) of 2006, as the Maoists re-entered the mainstream of Nepali politics and contributed to the peace process and state re-structuring. This led to the establishment of an interim government, the abolition of the monarchy, and the election of a Constituent Assembly charged with the task of drawing up a new constitution, for a secular, federal republic. The excitement of the early years of this period (2006-2008) was followed by seven years of political wrangling and lack of direction until, eventually, shortly after the April-May 2015 earthquake, a new Constitution was finally promulgated in September. This was marked by controversy, and <a href="https://www.nepalitimes.com/banner/few-jobs-created-by-nepal-employment-drive/" target="_blank" rel="noopener noreferrer">failed to advance</a> any of the promising elements of the <a href="https://www.nepalitimes.com/opinion/justice-in-transition/" target="_blank" rel="noopener noreferrer">CPA</a>, including Article 3.13. which envisaged ‘a policy of massive increase in employment and income generation opportunities by increasing investment in industries, trade and export promotion’. Sharma argues that ‘sluggish economic growth and <a href="https://www.nepalitimes.com/banner/missing-the-plot-in-nepals-job-scheme/" target="_blank" rel="noopener noreferrer">lack of jobs</a> have created economic precarity’, and that while demands for greater rights for various social minorities have tended to take centre stage, there has been little or no appetite on the part of government or opposition, development agencies or civil society, for economic justice.  Sharma argues that ‘beyond the immediate impact on the economy and lives and livelihoods, the earthquake had a seismic impact on Nepal’s long political transition’.  I would disagree. Although it resulted in the ‘fast-tracking of the Constitution-writing process’, the earthquake failed to promote a new sense of common endeavour or urgency, even as regards physical reconstruction after the earthquake. The interventions of the foreign agencies in its aftermath were un-coordinated and subject to widespread criticism. Controversies over aspects of the <a href="https://www.nepalitimes.com/latest/nepals-contentious-constitution-day/" target="_blank" rel="noopener noreferrer">Constitution</a> and the very different responses to it from China and India, provided fuel for a ‘new Nepali nationalism’, as Sharma suggests – even if this nationalism proved divisive rather than integrative. This period was marked on the one hand by a national debate over the precise form the promised new ‘federal’ structure would take, and efforts to delineate the contours of a new, more decentralised polity, while on the other hand, political discourse and practice continued to be characterised by the dominance of elite politics at all levels, national, regional and local, and by the pervasive and malign phenomenon of corruption and patronage. Sharma ends this chapter by remarking that ‘the politics of the distribution of development has been realised in practice by distributional coalitions’. In other words, development in Nepal is not the broad-based, inclusive form of positive economic, social and political transformation that the term often implies, but rather a narrowly conceived and implemented, and fragmented, ‘sharing of the spoils’. The book ends with a consideration of ‘Precarity and Paradox in Once-Remote Locations’, on the contradictions of globalisation for a social formation on the periphery of the global political economy that retains many of the characteristics of pre-capitalism. It also looks into the nature of life on the periphery – which involves integration in the global political economy but creates ‘precarious livelihoods’. Sharma is concerned that Nepal’s integration into the wider world has so far failed to generate the appropriate ‘counter-movement’ to safeguard and protect the lives and livelihoods of the majority of ordinary Nepalis, even if it has <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide/" target="_blank" rel="noopener noreferrer">apparently reduced poverty</a>, allowed the emergence of a middle class, and enabled <a href="https://www.nepalitimes.com/here-now/nepals-richest-man-in-the-pandora-papers/" target="_blank" rel="noopener noreferrer">a minority to accumulate considerable wealth</a>. Nepal’s continuing and arguably increasing reliance on foreign labour migration is both a cause and a consequence of the failure to generate decent, reasonably secure employment and economic opportunities within the country. It is a failure of both the public and the private sector, but it is also a consequence of the lack of an enduring movement for economic, social and political reform (or revolution) to bring about a ‘great transformation’ in Nepal. David Seddon is a former Professor of Development Studies at the University of East Anglia and now independent researcher and writer.Political Economy of Social Change and Development in NepalJeevan R. SharmaBloomsbury Academic India, 2021215 pp.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19989c7e80680e0ac829jpeg.jpg" alt="" width="180" height="291">

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Nepal’s elusive ‘Great Transformation’

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.

Flouting rules caused Saurya tragedy

French citizen Louis arrived in Nepal for the first time earlier this year, planning to <a href="https://nepalitimes.com/banner/the-abcs-of-a-winter-trek-in-nepal">trek the Annapurna Circuit </a>before heading down to Bardia to hopefully catch a glimpse of some<a href="https://nepalitimes.com/news/nepal-counting-its-tigers"> tigers</a>. Before he began his journey from Besisahar, Louis (who only revealed his first name) had imagined breathing crisp mountain air, and following the melodious gurgle of the Marsyangdi.&nbsp; Instead, he had to breathe fumes and dust all the way to Chame. Louis says he masked his face with a handkerchief: “It was not what I expected, this is not right.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304080_f03fce1527cf8a63178e4e82589a1a7096c8cfa28893ca4a5f7fe82d91a6e38a.jpg" data-media-id="editor_2" data-image-id="2025080304080_f03fce1527cf8a63178e4e82589a1a7096c8cfa28893ca4a5f7fe82d91a6e38a" data-rendition-name="original" width="2419" height="1814" loading="lazy" alt="Manang trails NT 1"> </figure>  Many other trekkers are similarly disappointed as roads have been built along what used to be <a href="https://nepalitimes.com/banner/a-walk-back-in-time-chandragiri-hatiban">walking trails</a>. Manang and Humla are the last remote regions in the Himalaya to be connected to the national road network. &nbsp;Construction of the 87km Besisahar-Manang road began in 1994, but was stalled during <a href="https://nepalitimes.com/news/14-years-after-conflict-no-closure-in-nepal">the Maoist conflic</a>t, and finally finished in 2012.&nbsp; Most of it has not yet been blacktopped, and sections have been carved out of vertical cliff faces, making them treacherous. But it has allowed road access to Manang, a journey that previously took a week on foot.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304084_32b3ca875a0df9f1dd42dbe915e6f6a2cd4f2e53f1cf2d3ee5cbdb3435905000.jpg" data-media-id="editor_5" data-image-id="2025080304084_32b3ca875a0df9f1dd42dbe915e6f6a2cd4f2e53f1cf2d3ee5cbdb3435905000" data-rendition-name="original" width="2400" height="1505" loading="lazy" alt="Manang trails NT 1"> </figure>  While the <a href="https://nepalitimes.com/opinion/the-road-out-of-nepal">road has improved access</a>, it has impacted on<a href="https://nepalitimes.com/here-now/trekking-in-the-time-of-climate-change"> trekking tourism </a>— the mainstay of Manang’s economy. The number of tourists visiting the scenic valley behind the Annapurnas grew from 21,245 in 2023 to 30,866 in 2024. The Annapurna Circuit is known for unique sights like <a href="https://archive.nepalitimes.com/news.php?id=9194">Tilicho</a>, one of the highest lakes in the world, the Thorong La pass that connects Manang to Mustang, and the valley’s own rich cultural heritage. Thorong La at 5,416m is the highest hiking pass in the world, and was used by locals for trade with Mustang before it became a <a href="https://nepalitimes.com/opinion/comment/lift-restrictions-on-upper-mustang">popular trekking route</a>. &nbsp; “For guests, the excitement of reaching Thorong La is now overshadowed by their disappointment of having to journey through dusty roads to get there,” says Manang lodge-owner Ongma Gurung. “That is the complaint we get the most.” <a href="https://nepalitimes.com/banner/tourism-that-treads-lightly-on-the-land">Local tourism </a>operators are trying to get the government to build alternative foot trails. But there have been delays due to a lack of budget.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304084_c5f76e398182785bb17846a148e3ca89de5687b4623580f8e2d725a7a287edfa.jpg" data-media-id="editor_11" data-image-id="2025080304084_c5f76e398182785bb17846a148e3ca89de5687b4623580f8e2d725a7a287edfa" data-rendition-name="original" width="2419" height="1762" loading="lazy" alt="Manang trails"> </figure>  The Naso Rural Municipality has identified other routes along the Annapurna Circuit in Chyamche, Tal, and Khotro so trekkers can bypass heavy vehicles involved in the construction of the Manang-Marsyangdi Hydropower Project. “But the local government cannot do everything,” admits the chair Dhan Bahadur Gurung. “And for leaders in Kathmandu, Manang is out of sight and out of mind.” Munindra Jung Gurung represents Manang in the Gandaki Provincial Assembly, and says he has raised the issue in <a href="https://nepalitimes.com/news/pokhara-s-tourism-woes">Pokhara</a>. He is hopeful there will be a hearing. To be sure, the road is not all bad news. Locals benefit, the number of visitors has grown, and trekkers can now also save time and use it to explore <a href="https://archive.nepalitimes.com/news.php?id=5960">side valleys in Manang</a>, visiting the villages like Nar and Phu. Annapurna Conservation Area (ACA) chief Rabin Kadariya concedes that the road to Upper Manang was crucial to connect the remote region with the rest of Nepal, but adds: “We have built an alternative trail connecting Talgaun, and we will consult local communities about their priorities on other hiking trails.”&nbsp;

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